Core Features To Evaluate When Choosing A Property Management Software
Every well-built property management software should have core features that save landlords time and money.
These core property management software features— rent collection, tenant screening, lease documentation, financial reporting, tenant communication, maintenance requests, and digital document signing— streamline your business and improve your tenants’ experience.
For example, collecting rent through software allows for automated payments, reminders of upcoming payments for tenants, and funds immediately placed into your bank. Whereas, collecting rent through hand-written checks requires multiple additional steps, including waiting for the check to come in the mail.
Just like rent collection, each of these core features of property management software benefits you and your tenants. Let’s explore each core feature you should look for when choosing property management software and learn why they’re important.
Online Rent Collection
Online rent collection will save you and your tenants valuable time and effort. Instead of a tenant writing a check and mailing it, they can set up automated payments or pay with the click of a button.
And it’s a feature your tenants want. According to the National Multifamily Housing Council (NMHC), nearly 80% of tenants prefer to pay their rent (and other rent-related bills) online.
It’s also beneficial for landlords. Automated reminders and payments mean more renters pay on time. You spend less time tracking down late payments and no longer need to deliver hand-written checks to the bank.
With most property management software, tenants simply enter their bank account or credit card information to begin setting up rent collection. The streamlined process makes life easier for you and your tenants.
Tenant Screening
Great renters are worth their weight in gold, and the best way to identify great renters is through thorough tenant screening. Property management software with tenant screening features can help you find those great renters.
Tenant screening features give you access to critical information about potential renters, including national data on their criminal records, credit history, and past evictions. Great software, though, will go beyond these features and help you manage these potential applicants. That includes collecting custom data (i.e., the breed, weight, and age of their dog) and managing the status of various applicants. Some even allow applicants to upload additional forms as a part of their application— a great way to acquire bank statements or pay stubs.
Lastly, ensure the screening software you choose can ask the kinds of questions you need it to ask—both for your prospective tenants and for yourself. For instance, if you allow pets, you may want to know the breed and weight. You may want multiple references. Make sure the software’s tenant screening features can handle this level of customization.
Note: When evaluating a software’s screening process, first look at how easy it will be for your tenants to access the application. If they can’t get to it easily, they are more likely to apply for a different rental unit or simply move on from your application.
Lease Management
Digital lease management helps you get leases finalized days before traditional turnaround times, increasing your leasing velocity. That efficiency means fewer showings, which saves you time and money.
Lease management features also allow you to stay organized and easily access your most crucial documents quickly. Rather than filing away printed copies, your lease agreements are stored in the cloud and accessible to both you and your tenants on demand.
When searching for a software tool, check for the ability to create reusable templates. Does the software automatically duplicate key information, like lease start dates and end dates, and insert that information into all the proper places in the document? Does it have a template creator that will assist you? Features like these help you create error-free leases faster than paper leases.
Note: Analyze software from the tenant side as well. Does it prompt tenants to insert information into the right blanks? How easy is it for your least tech-savvy tenants to use? If the software is intuitive for your tenants, it will save you time because you won’t have to figure out how to guide them through filling out the lease or problem-solve for points of confusion.
Financial Reporting
Property management software that generates detailed, accurate financial reports allows you to glean key insights that lead to better business decisions.
Many platforms have pre-designed reports ranging from profit and loss statements to rent rolls to budget reports. These give you a clear look at the state of your business and what you can do to improve it.
For example, when selling a property, the bank or buyer will often ask for a rent-roll. Likewise you can use a P/L report to track if your expenses are increasing from year-to-year. You can also see patterns of tenants who struggle to pay on time. These insights will help you make decisions that enhance your business. Financial reporting is also one of the best property management software features for small landlords who may lack the resources or know-how to splurge on expensive accounting software.
Tenant Communication
This feature is often more of an afterthought compared to others. But it’s quite important when it comes to managing properties. Landlords are more likely to retain tenants that feel heard and valued. According to the American Apartment Owners Association, over 60% of tenants say that communication with their landlords is their top priority as renters, but only 18% of landlords make it one. This disparity means landlords may want to rethink the true value of communication.
Poor communication can lead to negative outcomes. For example, if you don’t respond to maintenance tickets in a timely manner, you may alienate a tenant that planned to be a long-term renter. Great communication should be a priority because it’s your reputation, and possible revenue, on the line.
It should be easy to communicate with tenants through the desktop or mobile application of any property management software. It’s also important to have everything in one place, so you can refer to prior conversations if needed.
The platform you choose needs to have the groundwork in place to facilitate a great relationship between you and your tenants. This should include capabilities like automation and the ability to comment on maintenance tickets. Automated reminders, automated messages, and maintenance ticket chats help tenants manage payments and maintain awareness of what’s going on with requests. In turn, this creates a better dynamic between landlords and tenants because everything is out in the open.
Maintenance Management
You’re going to get maintenance requests; that’s just part of being a landlord or a property manager. And maintenance can be one of the most difficult parts of being a landlord. So, the question to ask when shopping for property management software is this: How can this software make maintenance requests easier—for me and my tenants?
The easier a platform makes it for people to submit tickets with lots of detail (pictures, descriptions, etc.), the better off you and your tenants will be when it comes to maintenance requests.
Maintenance requests are an opportunity to separate yourself from other landlords.
Note: Here are some vital questions you should ask before you decide if a software product’s maintenance management feature is worth it:
- How easy is it for a tenant to submit a ticket?
- Can they submit a ticket with their mobile device?
- How will you be notified?
- Can you have multiple users—maintenance staff, property manager, leasing manager, etc.?
- How does a maintenance provider get notified about a ticket?
Digital Document Signing
After a tenant is screened, it’s time to sign a lease agreement. This is the last step in legally binding the renter (and their potential income) to your property, so it is not something you want to delay. Property management software can help here, too.
A 2020 study by LunarPen found that electronic signatures (eSignatures) reduce document turnaround time by 80%. Digital document signing is vital to your operations because it saves time and effort.
Note: Most property management software includes some form of digital document signing. Look for programs that also allow you to create reusable templates. And the best programs expand beyond leases into other document types. This enables you to get signatures for parking addenda, pet agreements, and many other kinds of documents.
Conclusion
These seven core property management software features are critical to keep top of mind as you search for your software partner. With the right tool, you can cut days off the time you spend doing tedious tenant-related tasks and improve your bottom line.
The core features we’ve talked about are a great foundational litmus test for every landlord. However, software is not a one-size-fits-all solution. Make sure you do your research and test out different platforms. You may have other features that you need for your specific operation. Add those to your list.
Property management software will save you time and money; you just need to find the right fit for you.
